Millions Helped by New Overtime Rule; Salary Cutoff Will Adjust Regularly

I thought I’d spend a little more time discussing the Labor Department ruling raising the salary cutoff at which overtime is not required to be paid, another indicator of Obama’s latent liberalism coming out as his term ends. The ruling more than doubles the cutoff from $23,660 to $47,476, meaning that millions more workers will be required to be paid overtime. Overtime is exactly that – extra time. And American businesses have been making fortunes over the last 40 years by essentially getting their employees to work for free, often with the implicit, or even explicit, threat of losing their jobs if they don’t.  In 1975, 60% of workers were eligible for overtime; prior to this ruling, the current level was 7%.  This arbitrary cutoff is a vestigial legacy of the days when there were more clear-cut differences between managers and manual laborers, between white collar and blue collar, between union and non-union, between middle class and working class. Today, that distinction is much less clear as the middle class has shrunk significantly and the working class is under constant pressure.  The salary cutoff had only been raised once since the mid-1970s, and every year inflation ate away at the true value of that cutoff, leaving more and more workers with no compensation for the extra work they did. And that is the other important part of this new rule. Every 3 years, the salary level will be adjusted to keep up with inflation and adjustments in wages. Workers will no longer have to wait 40 years for the adjustments they deserve. If only we could do that with the minimum wage as well.